Securities board urged to appoint chairman amid rising stock market concerns

KATHMANDU: The Finance Committee of the House of Representatives has issued a directive to the federal government to urgently appoint a chairman for the Securities Board of Nepal, the regulatory body overseeing the country’s capital market. This move comes in response to growing concerns over the continuous rise in the Nepal Stock Exchange (NEPSE), which has seen sustained upward momentum in recent weeks.

The stock market’s persistent climb has heightened the risk of market manipulation, a concern that has been exacerbated by the absence of leadership at the Securities Board. The position of chairman has remained vacant for the past seven months since the term of the former chairman, Ramesh Kumar Hamal, ended in January.

This vacancy has led to the suspension of crucial regulatory processes, including the approval of Initial Public Offerings (IPOs), Further Public Offerings (FPOs), and other securities.

Finance Committee Chairman Santosh Chalise emphasized the urgency of the situation, stating, “The government’s prolonged delay in appointing a chairman has hindered the regulatory body’s ability to effectively manage the market.

With the stock market continuously rising and new investors entering the market, the risks are significantly high. Therefore, we have decided to direct the government to appoint a suitable and qualified individual as the board’s chairman without further delay.”

The selection process for the new chairman has been complicated by political disagreements among the ruling parties. Although a selection committee was formed earlier this year under the chairmanship of the then-Vice Chairman of the National Planning Commission, Min Bahadur Shrestha, the committee has been unable to reach a consensus on recommending candidates for the position.

The situation has been further complicated by a Supreme Court order, issued on July 2, which temporarily halted the cancellation of the selection process. As a result, the government has yet to move forward with appointing a new chairman, citing the ongoing legal proceedings.

In light of the sensitive nature of Nepal’s capital market and its direct impact on the financial well-being of general investors, the Finance Committee has also called for the submission of a comprehensive work plan, including legal and regulatory reforms related to the Securities Board, within 15 days.

The delay in appointing a new chairman has raised concerns among investors and stakeholders, with many calling for swift action to restore stability and transparency in Nepal’s stock market.

The prolonged vacancy at the helm of the Nepal Securities Board has not only stalled key regulatory functions but has also left the market vulnerable to potential manipulation, especially as major business groups continue to vie for influence over the new stock exchange license.

As the situation unfolds, all eyes are on the government’s next steps in addressing the leadership vacuum at the Nepal Securities Board and ensuring the integrity of Nepal’s growing capital market.